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Being first to market in the industrial automation space is no easy task, and involves creating new vocabulary, redefining technology territories and communicating technical messages in an easy to understand manner. Invensys faced this challenge head on In 2006 when they introduced InFusion ECS as the world’s first Enterprise Control System. InFusion ECS was part of a Blue Ocean marketing strategy by Invensys, which means to create new market space or a “blue ocean”, thereby making the competition irrelevant. Although the launch was successful, trying to create a new market space in an engineering-driven market presented some very interesting challenges. Among the greatest challenges included: driving a business value proposition in an technology-focused segment – a shift from product features to business solutions overcoming the devaluation of the technology itself as a commodity and demonstrating the huge potential value of automation/information technology overall to the business; driving a human empowerment theme in a market where automation replaces human power; driving a collaboration between accounting and engineering, two functions that do not see eye to eye showing the value of instrument and control engineering to an audience that has diminished those skill sets to a thing of the past; sales channel disconnects; and market message targeting.Dr. Martin will share the journey that Invensys took for the launch of InFusion ECS from a sales and marketing perspective. He will expose the challenges, barriers and pitfalls and Invensys’ ongoing diligence and their continued persistence to overcome them and to thrive in a difficult industrial automation marketplace.
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Invensys and the Invensys logo are trade marks of Invensys plc10 April 2023
Invensys proprietary & confidentialSlide 1
© 2009 Invensys. All Rights Reserved.The names, logos, and taglines identifying the products and services of Invensys are proprietary marks of Invensys or its subsidiaries. All third party trademarks and service marks are the proprietary marks of their respective owners.
© Invensys 10 April 2023Invensys proprietary & confidential2
The Trials and Tribulations of Creating a New Market Space – The ECS Story
Peter G. Martin PhDVice President and FellowInvensys Operations ManagementSeptember, 2011
© Invensys 10 April 2023Invensys proprietary & confidential3
1The Situation
Business Level Technology
• Commoditization strongly taking hold
• ERP Software dominating purchase decisions
• Consuming Capital Budgets
• Adding little measurable value
• Protected by CIO/CFO due to investment levels
• Consuming functionality
• Service Oriented Architecture (SOA) focus
• IT/IM often relegated to infrastructure
• Viewed as cost centers – not value centers
• Connect ERP and Automation “because we can” mindset
• Integration adds no value on its own
Automation Level Technology
• Commoditization strongly taking hold
• Limited green field activity
• Technological differentiation hard to find harder to sustain
• Many technological features adding no business value
• Capital project centric
• Aging installed automation assets
• Lack of compelling event to upgrade/replace
• Lack of cost effective integration
• ERP integration a suck up – no improvement
Capital Budget Mindset
Replacement technology
Project team mentality
Measurement of benefits
TIME
$
Anticipated
Actual
Return on Automation Investment
PrIce
Time
$ ROI
Economic Benefit
Cost to Modernize
NotMeasured
SometimesMeasured
$
Time
Cash Flow Analysis
0
100% Return
ROI Mentality – Negative or Zero
Current Industrial Plant Architecture
SafetyControl
Systems
DistributedControl
Systems
SCADASystemsManufacturing
ExecutionSoftware
HMISoftware
Advanced ApplicationSoftware
DistributedControl
Systems
DistributedControl
Systems
ManufacturingExecutionSoftware
Advanced ApplicationSoftware
© Invensys 25 February 2011
What is the problem?What is the problem?
Slide 10
Unification through Process Historian Reporting Infrastructure
AutomationSystems
InformationSystems
PlantHistorian
© Invensys 10 April 2023Invensys proprietary & confidential11
2The Business Level Market Drivers
Executive Industrial Driving Forces
Transactional Business Real Time Business
Process Control Profitability Control
Replacement Empowerment
Rigidity Agility
Islands of Operation Collaborative Operation
Real-Time Profit Impact Model
Production$
Material$
Safety- people- plant- environment
© Invensys, February 2011
Energy
$
From
To
© Invensys 10 April 2023Invensys proprietary & confidential14
3The Strategy
Blue Ocean Strategy
Value
Costs
BlueOcean
(newMarketSpace)
RedOcean
(EstablishedMarketSpace)
Harvard Business Review, Oct. 2004
Red Ocean - Blue Ocean Strategy
Red OceanRed Ocean Blue OceanBlue Ocean
Compete in existing market space
Beat the competition
Exploit existing demand
Make the value/cost trade-off
Align the company’sactivities with strategic
differentiation or low cost
Create uncontested market space
Make competition irrelevant
Create and capture new demand
Break value/cost trade-offs
Align the company’sactivities in pursuit of differentiation and low cost
Harvard Business Review, Oct. 2004
Blue Ocean Results Consistently Outperform Red Ocean
Create uncontested market space: Measurable Value Improvement Open Enterprise Control System
Microsoft based iSOA
Make competition irrelevant Measurable Value ImprovementReduce integration cost 90%Multi-vendor perspective
Create and capture new demand Measurable Value Improvement
Break value/cost trade-offs Low Cost Unified Delivery SystemVisible High Value Results
Align the company’s activities in Godzilla Program – 18 teamspursuit of differentiation and low cost
Blue Ocean Invensys
Objectives of Godzilla
$
Time
ROI
Godzilla
DeliverMeasurable PerformanceImprovement
RadicallyReduce
Lifecycle Cost(ECS)
Plant/Enterprise Architecture
SafetyControlSystems
DistributedControlSystems
SCADASystemsManufacturing
ExecutionSoftware
HMISoftware
Advanced ApplicationSoftware
DistributedControlSystems
DistributedControlSystems
ManufacturingExecutionSoftware
Advanced ApplicationSoftware
Enterprise Control System
© Invensys, February 201134
Slide 20
Performance-Based Infrastructure
PlantHistorian
EnterpriseControlSystem
Enterprise Control System
Collaboration across complete enterpriseCollaboration across complete enterprise
© Invensys, February 201135
© Invensys 10 April 2023Invensys proprietary & confidential22
4The Challenges
Invensys Internal Critical Challenges
• Overcoming technology-project-product focus
• Conservative Engineering Perspective
• Accepting multi-vendor solutions
• Delivery capability (IT infrastructure)
• Technology development
• Multiple company mindset & organization
• Selling – Channels
• Leadership changes
Invensys Market Critical Challenges
• Technology – price focus
• Capital project focus – improved value of no value
• Buying measureable value not just technology
• What is an ECS and Who buys an ECS?
• Accepting multi-vendor solutions
• IT – Automation engineering relationship
• Market Perspective of Invensys companies
• RFPs Targeting Traditional Automation Systems
© Invensys 10 April 2023Invensys proprietary & confidential25
5Initial Results
Invensys Initial Results• Increased orders primarily due to vision
• Clients unsure how to buy full ECS
• IT, Engineering or both
• Internal organizational struggle for control
• Wonderware – IPS
•Initial technological limitations - Five year rollout
• Insufficient marketing investment
• Lack of Delivery acceptance – delivery conflicts
• Client confusion – Bait and Switch Appearance
• Results decent – but below aspirations
© Invensys 10 April 2023Invensys proprietary & confidential27
6Invensys Response
Invensys Response• Reorganize to Strategy
• Invensys Operations Management
• ECS/Value-Oriented IOM Leadership
• Innovation-oriented leadership
• Reinvigorate InFusion ECS
• Added Client-Focused ECS lead
• Unify branding approach and marketing campaign
• Unify Channel Management
• Establish Business Value Consulting team
• Establish Business Value executive Sales Channel
• Value-Based Case Studies
$
Time
Cash Flow Analysis
0
100% Return
$
Today’s Results
• Strong InFusion ECS Order Profile
• Strong Invensys Growth
• Key Client Acceptance
• ExxonMobil,
• Business Value Sales >50% over expectation
• Strong Executive Relationships
Not Quite Blue Ocean Impact – But Getting There
Invensys and the Invensys logo are trade marks of Invensys plc10 April 2023
Invensys proprietary & confidentialSlide 31
